Having a presence on farms is key for change
Having a presence on farms is key for change

How Mondelez overhauled its cocoa supply chain

16 April 2018

If she hadn’t visited the cocoa farms supplying Mondelez, Cathy Pieters wouldn’t have see there was “an urgent need” to rejuvenate many of the plants.

“If you walk around the cocoa farms a little you will notice that the trees are old, they’re very diseased. But it takes a little bit of courage to cut out the bad plants and put in new trees,” she told SM.

“That is something you can tell people to do, but farmers know their trees. They’ve been living with their trees for 20 years and it’s very difficult for them to cut them off.”

This is one of the reasons why it has been important for Pieters, programme director at Mondelez’s Cocoa Life, that she and her team have a presence in the farms and collectives supplying the food giant. Her presence not only allows her to identify needs that may otherwise not been evident, but is also part of building trust.

In response to the ageing trees, Cocoa Life invested in and distributed improved planting materials. The plan was to provide the material for free in year one, at half price in year two and finally full price in year three. But, said Pieters, once the farmers were onboard and saw the effects of the new material, they were happy to pay for it in full by year two. “They had seen the difference themselves,” she said.

“The other thing that makes Cocoa Life specific, the thing that drives me most: when you see the moment that the cocoa farmer realise that they’re actually part of the solution. They’re moving out of an assistance situation into an empowered situation, that’s the magic.”

Cocoa Life, Mondelez’s in-house sustainability programme for cocoa sourcing, has just published its third annual progress report. By the end of 2017 the programme was reaching 120,300 farmers in 1,085 communities, the company said, covering 35% of its global cocoa needs and active in countries including Cote d'Ivoire, Ghana, Indonesia and Brazil. Mondelez is one of the world’s biggest cocoa buyers, and owns brands including Cadbury, Cote D’Or and Milka.

The programme aims to create a sustainable cocoa supply chain by supporting farming communities and improving the farming practices of its suppliers. And while a lot of the programme’s work is done through Mondelez’s first tier suppliers, Pieters and her team also work directly with farmers, collectives, NGOs and governments to ensure their efforts are well targeted.

“Cocoa buying used to be a transactional thing, and it was a whole gray box in there, we didn’t know anything,” said Pieters, who has led the programme since its launch. “What we’ve created with Cocoa Life – the company was determined to understand that supply chain because it was so broken.”

The programme focuses on measuring outcomes and impacts. For example, are farming households earning more money, is productivity going up, are income streams within the communities more diversified and are women getting more access to finance? “It’s not that complicated. Cocoa farmers need to be pulled out of poverty and benefit from living in thriving communities with good infrastructure, so that’s what we’re focusing on,” said Pieters.

However all countries have slightly different priorities. Indonesia, for example, already has an “extremely good” schooling infrastructure. “Ninety-nine per cent of the kids in the cocoa growing communities go to school. That’s a different situation in West Africa,” said Pieters. “We have common KPIs on a global level but the interventions will be different because the baseline situation is different.”

Cocoa Life made the news in 2016 when Cadbury, a Mondelez brand, announced they were dropping Fairtrade accreditation to move to their own in-house scheme. This drew criticism for the firm, but Pieters insists the scheme is fully third party verified, outcomes are annually assessed, and that their relationship with the Fairtrade Foundation is stronger than ever.

“Although we left the compliance mechanism, we actually built a stronger partnership and we’ve pooled Fairtrade Foundation capacity into the implementation of Cocoa Life,” she said. “By making [Cocoa Life] a proprietary investment and programme, we can really oversee the accountability and the results of our interventions. We can really see what’s happening on the ground.”

A spokesperson for Fairtrade said this was an accurate characterisation of its relationship with Cocoa Life.

Katie Burgess, head of commercial partnerships at Fairtrade, told SM: “Our partnership with Mondelez and Cocoa Life is an exciting development as it embeds Fairtrade, our values, principles and unique relationships with farmer networks into the whole programme.”

Continued expansion of Cocoa Life, to capture more of Mondelez’s cocoa supply chain, remains a priority. But Pieters also wants to start asking questions about the future – including whether the smallholder model of farming can still be sustainable.

She also plans to continue spending a large portion of her time in the field. “Nothing is as powerful as seeing it for yourself,” she said.

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